Scrutiny and Audit CommitteeAnnual Report2014 - 2015Published September 2015

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Cllr Richard ThomsonVice Chair of the Committee (to June, 2015)

Cllr Ross CassieVice Chair of the Committee June, 2015 onwards.

Cllr Gillian OwenCommittee Chair

Aberdeenshire Council Scrutiny and Audit Committee

Welcome to the Aberdeenshire Council Scrutiny and Audit Committee annual report for 2014/15.

This is the third full year of operation since the local government elections of 2012, during which the Committee has continued with its innovative approach, through the adoption of new technology to support its function, as well as in terms of how it investigates matters of wider interest and concern. There has been an extended and refined approach to the use of informal workshop sessions as an enabling process, when it comes to determining topics for formal investigation. Internal Audit continues to be a prime focus of this Committee; ensuring the Council’s systems and processes are fit for purpose is key, as is continual financial monitoring.

Since April 2014, we have undertaken an investigation; Charging for Services – Are you getting it right?, presenting to Full Council a series of recommendations that will assist both Councillors and Officers in making the right choice when it comes to spending the monies we have gathered on behalf of all our residents. The first of these recommendations was to ensure that all services were fully aware of the unit cost of providing their service.

At the meeting of Committee on 30 October, it was agreed that the Committee would look at Alternative Delivery Models. The Council has experienced a number of years of financial restraint and, whilst accepting that significant achievements were made, we are all aware of the financial challenges that we are going to have to face in future years. This Committee’s skills continue to grow and we have gained a wide knowledge and understanding of topics by delving into it; we are better equipped to look at investigations in an independent manner, unswayed by any service.

We carried out topic scoring in the same way as usual this year, except Alternative Delivery Models was added to our list. In December 2014, the Committee agreed to this being our investigation; work has continued and a report was be presented to Council in June, 2015.

Selecting topics is a key area but the Committee does have other roles on which to focus, including monitoring, or reviewing, national reports from Audit Scotland. It is expected that this role will continue to expand.

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Cllr Richard Thomson Cllr Ross CassieCllr Gillian Owen

The Committee has continued with the timetable for investigations which will result in two investigations being carried out per year, giving time for a series of workshops and mini investigations on current issues or concerns. Workshops have been held on:

• Budget Monitoring (June 2014);• Early Departure Payments (November 2014);• Procurement and Commercial (updating on the reviewed service aims,

resources and priorities) (1 December 2014);• Recruitment and retention of teachers and the update position on Pupil Support

Assistants (17 December, 2014);• Economic Development – Regeneration – Update (21 January, 2015);• Technological aspects of Health and Social Care Integration (19 February, 2015);

and• The Local Government Benchmarking Framework and the Council’s

Performance Management system (26 March, 2015).

The Scrutiny and Audit Committee continues to concentrate on the issues that can effect change. The current budget pressures in public spending mean that it is even more crucial that the Council is assured that resources, fiscal and staff, are well husbanded and directed to where they have the greatest impact on serving the communities of Aberdeenshire. The services we deliver are crucial for all, and if our Committee can find even one small way to help effect change, and make the whole organisation more efficient and cost effective, then we shall have done our job.

We would like to place on record our gratitude to all Officers who have assisted in the operation of our Committee, also to the many visitors that have come before us, and to all those who have welcomed us to their place of work.

Members of the Committee

Cllr Gillian Owen (Chair)

Cllr Richard Thomson (Vice-Chair to June, 2015)

Cllr Ross Cassie, (January 2015 and Vice Chair June 2015)

Cllr David Aitchison (to January 2015)

Cllr Nan Cullinane

Cllr Sandy Duncan

Cllr Katrina Farquhar

Cllr Jim Ingram

Cllr John Latham

Cllr Alastair Ross

Cllr Cryle Shand

Cllr Ian Tait

Cllr Michael Watt

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Work of the Scrutiny and Audit Committee in 2014-15

To determine the Committee’s work plan for the year ahead, in February 2014 Members considered 21 subjects, (18 new and 3 deferred from consideration in previous years), which had been suggested by other councillors, or council officers, as possible investigation topics. In providing supporting evidence for their submissions, councillors and officers were asked to consider:

• Residents and Employee Surveys;

• Internal and external audit reports;

• Issues raised by residents, local community groups and external organisations;

• Government policies and priorities;

• Council policies and priorities;

• Feedback on the Council’s performance from other agencies;

• Previous Scrutiny and Audit investigations; and

• Performance Management information.

The topics, with Senior Management Team input, were considered on 6 February and formally approved by Committee at its next meeting on 12 February. The Committee decided not to proceed where investigation would duplicate work already being undertaken, internally or externally; or if the matter had recently been subject to a change in policy. In the same way, the Committee decided not to proceed with a review if there were legislation pending which would impact on the service delivery, or if it was a matter over which the Council had no direct control.

What do we do?

Roles and Remit of the Committee

Overall, the Scrutiny and Audit Committee has four main functions:

1. To be a traditional audit committee with a focus on risk, control and assurance and financial reporting.

2. To maintain an overview of service savings1.

3. To exercise scrutiny over the Treasury function.

4. To examine the effectiveness of council policy implementation and service delivery through a self-determined programme of investigations.

The role of the Committee is defined fully in the Aberdeenshire Council Scheme of Delegation, which can be viewed online at www.aberdeenshire.gov.uk/councillors

1 This role was removed by Policy and Resources Committee, 14 November, 2013

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The range of topics suggested in 2014 was as follows:

You suggested… We did…

Effectiveness of Council Economic Development Strategy/ Economic Development

Initial workshop to define focus held 21 April, 2014 – deferred for further consideration of specific Regeneration aspects. Observed Infrastructure Service Committee mid-term strategy review, 15 May. Attended All Energy Conference 21 May. Regeneration workshop held 30 June - reported to Committee 24 September 2014 – determined no further action at present, given other ongoing works and scrutiny of this activity. Further Regeneration focused workshop held 21 January, 2015.

Role and Function of Quality Improvement Officers in Education, Learning and Leisure/ Leadership in Head teachers

Merged to workshop on Assuring Accountability – Safeguarding of Roles, Standards and Remits: The Role of Quality Improvement Officers and Head Teachers – held 8 May. Outcomes reported to Committee 26 June 2014 – agreed no further action at present.

Accounts Commission – Charging for Services: Are you getting it right?/ Charging for Services

First investigation for 2014/15 – Scoping reported to Committee 22 May, 2014 – Lead Service Briefing 3 July – evidence gathering Autumn 2014. Reported to Council 22 January 2015 CLICK HERE

Procurement – sourcing of local foods No action – already under consideration elsewhere.

Tendering Procedures No action at present – new procurement transformation project approved by Policy & Resources, February 2014.

Workload on Officers No action – kept under review by managers, Performance Indicators and Performance Management.

Recruitment and retention of carers No action at present – under consideration by Social Work & Housing Committee, pursing various initiatives.

Licensing Boards No action – request information/ seminar for Members’ information of the semi-autonomous board.

Calendar No action at present – assured new software installation will look at issues.

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Assess demand responsive transport solutions for rural areas

No action – similar topic led to workshop consideration in 13/14.

The Standards Commission No action – outwith Committee remit.

Employee initiatives - are these value for money within the bounds of efficiency and the well-being of staff?/ Business Transformation

Topics merged – Business Transformation Workshop held on 4 September, 2014 – reported to Committee 30 October, 2014 - no further action required at present.

Financial management and processes in the council

No action at present - Workshop sessions previously held 12/13.

Public Engagement Workshop held 15 May – returned for formal outcome consideration 26 June, 2014 – agreed no further action at present.

DEFERRED FROM PREVIOUS YEARS:

School Meals Dismissed – already being reviewed by the Education, Learning and Leisure Committee.

Clerical staff in schools – are they getting enough hours to complete the work assigned to them and all the extra work they have to do?

No action at present – budget allocations were instated from 11/12 – Education, Learning and Leisure already monitoring and reviewing.

Corporate Diary Management No action at present – assured new software installation will look at issues.

In addition to these areas of interest, the Committee has continued to pursue concerns identified in previous topic consideration.

From the previous topic choices, the issue of the quality of Access to Educational Opportunity was begun with visits to Portlethen Primary School and the Mearns Academy in May, 2013. It was decided to visit schools in the north of Aberdeenshire to see if they experienced the same challenges and difficulties. In spring, 2014, the Committee visited Peterhead Central School. The visit to Fraserburgh Academy took place on 25 June, 2014, and was reported to formal Committee in September, 2014. Commending the work of staff across all the schools visited, it was determined that there was no appropriate further action required at present.

On 30 October, 2014, the Committee revisited topics suggested, including those deferred in previous years. A workshop on Early Departure Payments was held on 10 November and reported to Committee on 19 February, 2015. Workshops on Procurement and Commercial (updating on the reviewed service aims, resources and priorities) and Education (recruitment and retention of teachers and the update position on Pupil Support Assistants) were held on 1 and 15 December, 2014 and reported to Committee on 19 February 2015. It was also agreed that the second investigation for 2014/15 be Alternative Delivery Models. Work began with evidence gathering sessions on 29 January, 2015, with sessions concluded in late March. The report has been finished and was presented to Council in June, 2015.

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Monitoring of Previous Investigations

Since its inception, the Committee has undertaken 27 investigations. From 2007, the Committee has also received formal reports on how its recommendations arising from investigations, and subsequently endorsed by full Council, are being applied.

Some recommendations are simple changes in processes and can be observed in action within a reasonably short time; others are more cultural in their application and may take a considerable time to establish and demonstrate to be effective.

Every six months, a report collates updates on progress with the recommendations, giving Members the opportunity to consider any barriers to implementation. The Committee may also dismiss matters from consideration if it is felt that the recommendations are no longer valid or have been overtaken by events. In this way, since the last annual report, all recommendations falling under the remit of the Community Planning Partnership, within the Community Planning and Empowerment Investigation, (No. 22, March 2012) have been dismissed.

Members are keen to keep clear the distinction between their monitoring of the application, or otherwise, of Council-approved recommendations arising from Scrutiny and Audit investigations, and the specific remit over operational matters by each of the policy committees.

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Internal Audit

A key responsibility of the Committee is to ensure that the Council’s Internal Audit function is properly resourced and has appropriate standing within the Council. It also reviews the activities of Internal Audit, including its annual work programme.

Each formal meeting of the Committee receives the reports from the Chief Internal Auditor which have been presented to policy committees. In 2013/14, Aberdeenshire Council determined that Internal Audit reporting should be split into matters which could be discussed in public, in order to increase public transparency and accountability, and items which, for reasons listed in the Local Government (Scotland) Act 1973, should not be debated in open session. To highlight the importance which Members attach to this aspect of their role, these confidential reports are now taken first on the Scrutiny and Audit Committee agenda.

The Committee continues to monitor the number of agreed recommendations, arising from Internal Audit investigations, which services have not implemented successfully by the agreed date. The total has fluctuated across the year as new actions are added and others completed and dismissed. The Committee exercises keen scrutiny in relation to this, and to recurring breaches of the Council’s Financial Regulations over the year. Internal Audit has highlighted a range of concerns throughout the year relating to compliance with Council policies and procedures, and with regard to delays in the implementation of recommendations agreed in Internal Audit reports. The Chair and Vice-Chair of the Committee have, in turn, raised these concerns with the Chief Executive and received assurances about the commitment of the Strategic Leadership Team to address these.

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Whilst this is concerning, management responses and action have been proportionate and improvement is expected. The Committee will continue to monitor progress on this front.

Following receipt of these internal audit reports, Members have, on occasion, requested follow-up sessions with officers to discuss any areas of concern which remain. Sometimes these take place at the next formal Committee meeting, but, on occasion, standalone meetings are convened. This is a relatively new process for the Committee, but is one which it will continue to employ in the exercise of its scrutiny function where it is felt appropriate to do so.

Given the recent establishment of a joint internal audit service shared between Aberdeenshire Council and Aberdeen City Council, this area of work will continue to be monitored in terms of provision of service to Aberdeenshire Council within the allocated resources.

External Audit

The Scrutiny and Audit Committee is responsible for managing all aspects of the Council’s relationship with its external auditors, including the review of annual work programmes and strategic risk analysis. The Committee is also charged with monitoring progress of any actions agreed by the Council in response to external audit concerns, and ensuring that implementation is carried out as agreed.

Deloitte continue as the Council’s external auditors, and report their own assessments of the Council’s operations, as well as on follow-up matters arising from national work undertaken by Audit Scotland.

Deloitte representatives regularly attend Committee meetings and, in turn, consider the Committee’s operation as part of their assessment of the Council’s governance and scrutiny.

In September, 2014, the Committee considered Deloitte’s comments on the audited accounts, together with a management team response to the issues raised.

External Inspections

In 2006, the Committee was charged with receiving reports on the outcomes of External Inspections across Aberdeenshire’s services, with the caveat that these should have already been considered by the parent policy committee or management team. The most regular reports were from the Education, Learning and Leisure Service, giving a collective over-view of Her Majesty’s Inspectors of Education (HMIe), now Education Scotland, assessments of educational provision in individual schools. The Social Work & Housing Committee annual report on the Care Inspectorate’s assessments of establishments and services was also reported to Scrutiny and Audit. However, in November, 2013, a requested report on how the assessments/ inspections were considered by other committees was submitted. The Committee agreed that the prime responsibility for monitoring the overview reports should revert to the parent committees. In May, 2014, the Education, Learning and Leisure Committee agreed that it should receive regular reports, starting in August, 2014. Scrutiny and Audit has monitored, and will continue to monitor, the application of this decision.

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Financial Monitoring

The Committee has responsibility for budget monitoring overview, considering update reports on service savings, and in this year, has been given oversight of the ‘Six Key Areas For Development’ works.

The Committee recognises that financial monitoring is an important part of its role within the Council’s governance structures. Although the Policy and Resources Committee in November 2013 discharged the Committee from delegated authority to monitor revenue budget savings, this remains an area of keen interest to Scrutiny and Audit Councillors. To develop their understanding more fully to meet any budget challenges which may lie ahead, a workshop was held with the Corporate Finance Manager and Chief Internal Auditor on 18 June, 2014. This session considered any lessons learnt from the determination, and application of savings in previous financial years and how the processes for managing these more effectively are to be implemented in future years.

Risk Management

Aberdeenshire Council has delegated authority to the Scrutiny and Audit Committee to review, in conjunction with Council managers, the adequacy of risk assessment arrangements and procedures.

As the process is now well embedded within the Council’s operating and governance procedures, the Committee’s input has reduced to an annual oversight of all the risk registers. In December 2014, Committee considered a report by the Risk Manager highlighted increasing awareness by Services of

risks relating to (a) the use of Social Media, (b) the increasing prevalence of ‘Cyber Crime’ and the overall security of computer systems (particularly stand-alone applications) and data, (c) Health and Social Care Integration, (d) Data sharing with other Services and/or Partner organisations, with particular emphasis on Child Protection, and (e) the impact of Business Transformation projects on services.

The Committee has been advised that work is in hand to transfer the registers and their review process to the ‘Covalent’ system - which could capture live information and be interrogated in a variety of ways to generate management reports. Members were interested to see how that process will be accomplished.

Treasury Management

In April 2012, the Committee was given powers to review the treasury management policy within the context of the Risk Management Strategy, as well as to make any appropriate recommendations to the Policy & Resources Committee.At its meeting on 19 February, 2014, Members considered a report, Treasury Management Strategy Statement and Prudential Indicators 2015/16, and, after a full discussion, agreed to recommend them to the Policy and Resources Committee.

Prior to this, in pursuit of increasing and reaffirming its awareness of Treasury Management, the annual session on Treasury Management was held on 4 December, 2014. Members of the Policy and Resources Committee, which also has Treasury Management responsibilities, were invited to attend this session.

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Training and Self-Assessment

The Committee has continued to build on its commitment to self-improvement and performance monitoring. Councillors continue to develop and apply their skills and approaches needed to fulfil the Committee’s remit. In 2014 training focused on the investigation process, when Members met with Dr. Andrew Coulson of INLOGOV to consider tools for effective scrutiny. The outcomes of this training will inform how future investigations are undertaken.

While acknowledging that effective scrutiny is a responsibility of all Elected Members, the Committee continues to seek further training and development opportunities to enable it to carry out the particular functions expected of it. For example, Health and Safety Training for Members was delivered after formal Committee on 11 December, 2014.

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Looking forward

Since the end of March, the work of the Committee has continued. There have been changes to the make-up of the Committee, which, following a change in political administration, now has an opposition chair.

The Committee completed its work on Alternative Delivery Models and the investigation report was submitted to, and approved by, Aberdeenshire Council at its meeting on 18 June, 2015.

It was agreed that the first investigation topic for 2015/16 be The Contracts Register, with the evidence gathering and consideration planned to start after recess, in August, 2015. It is hoped that this work will be concluded to report to Council in spring, 2015.

Workshops are to be scheduled on (a) Her Majesty’s Inspectorate of Education/ Education Scotland

and Care Commission external inspection reports, and what the council does with them;

(b) the Council’s Risk Register and supporting processes; (c) Key Worker Housing; and (d) Teacher Recruitment. The workshop outcomes will be reported to formal Committee for consideration of any further action, including escalation to formal investigation, required.

In addition, initial reports have been requested on topics where the Committee wants to have a greater understanding of the issues involved before considering appropriate action. Subjects to be reported include an update on the Council’s Economic Development function, focusing on regeneration and projects such as Energetica; the maintenance of Council House gardens; and historic aspects of Aberdeenshire towns.

A full list of the topics proposed, and the Committee’s decisions on what to do with them, may be found HERE

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Scrutiny and Audit in Aberdeenshire

The members of the Scrutiny and Audit Committee are keen to involve a wide range of stakeholders in our work and would be happy to arrange meetings at venues that are convenient to you.

If you have an issue which you think the Scrutiny and Audit Committee should explore, do let us know. For advice, please call the Council Headquarters and speak to Jan McRobbie, Support Officer, Scrutiny and Audit, on 01224 664617, or email her at jan.mcrobbie@aberdeenshire.gov.uk

Our meeting dates are on the Aberdeenshire Council website: www.aberdeenshire.gov.uk or you could call our support office and request an agenda and meeting papers.

Formal meetings of the Committee are open to the public and you will be welcome to join us.

Work Programme Suggestions

We would also like to receive your views for work programme items on issues that affect the way Aberdeenshire Council delivers its services to you, or carries out its operations. The Scrutiny and Audit Committee is not a complaints system, nor does it make policy. The Committee’s role is to challenge and scrutinise the way the Council and its committees carry out their functions in delivering services to the people of Aberdeenshire. Any specific complaints should be directed to the Council officers or service responsible.

You can email your suggestion to: jan.mcrobbie@aberdeenshire.gov.uk

In the first instance, we only need a few details from you – we will contact you for more information and let you know what will happen to your suggestion.

Or you can use the form provided: send it to Jan McRobbie, Support Officer, Scrutiny and Audit, Aberdeenshire Council, Woodhill House, Westburn Road, Aberdeen, AB16 5GB.

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Your name:

Your address:

Email:

Telephone number:

When is the best time to contact you?

Title of Investigation Topic:

Why this topic should be considered for investigation:

Key questions that should be considered as part of the investigation:

Source of the proposed topic:

Please continue overleaf if necessary. Published September 2015

Produced by Aberdeenshire Council GDT23700 September 2015